Special report: can the spa industry solve its staffing problems before it’s too late?

The good news is that the spa industry continues to grow at an amazing rate, thanks in large part to the growing global interest in wellness, and to continuing advances and discoveries in health and beauty. In August, ISPA reported that the number of US spa visits had increased from an estimated 179 million in 2015 to 184 million in 2016, while the industry continues to experience steady growth in overall revenue, locations and revenue per visit. The global spa market is also expected to rise at an estimated compound annual growth rate of 5.66% from 2017 to 2021.

What does this mean? Jobs! Hurray! Who doesn’t love jobs? But job openings are one thing; filling them is another.

Staffing is consistently one of the biggest problems in the spa and wellness industry, and is becoming a bigger one. This is the bad news: spas, salons, and related businesses can’t find the qualified service providers and managers they need to keep up, and turnover is huge.

In August ISPA reported that that there were 32,930 vacant positions for service providers in the US spa industry alone. Meanwhile, according to the Global Wellness Institute, in 2018 an estimated 2.8 million people will be employed by spas worldwide, and an additional 470,000 therapists and spa managers/directors will be needed by the industry in 2020.

That’s a lot of positions to fill.

For this report Spa Executive spoke with some experts about staffing issues plaguing the spa industry, and how spa owners and directors can move towards solving them.

Lynch has partnered with ISPA in a bid to do just that. ISPA president Lynn McNees recently said that promotion of careers in the industry would be an important ISPA initiative moving forward. So, Lynch and ISPA have launched Get Your Dream Job, a campaign to spread the message about the benefits of working in spa, salon, and wellness to attract job seekers through various partner organizations.

Unfortunately, however, some of the negative perception they’re seeking to stamp out is, well, kind of earned. And it’s also the industry itself that needs to change.

“If someone wants to travel, or to work their way up within an industry, this is one where that is possible,” she says. “If you’ve got a bit of a brain and some ambition, you can get up the ladder very fast.” But she’s also critical of some of the issues, including often underpaid staff, and education costs that are disproportionate to potential earnings.

“The cost of a beauty therapy diploma can be about $30,000 USD for a two year course, after which you’re only going to make about $45,000-$50,000 a year,” Moore says.

“Spas need to make sure that they’re paying reasonable salaries. This varies from country to country, but employees should be paid reasonably for their work. Imagine the energy required from these girls and guys to do eight to ten massages a day. It’s a strenuous and full-on experience for them, and a lot of times they’re not compensated well for it.”

But you can’t pay people well if you don’t have any money. And profit margins are very low for many spas.

Yes, in some places, the salaries are great. In others, less so. “There are places like the Maldives and Dubai, where one can make a lot of money,” says Moore, “but in many places you’re looking at very low margins for a variety of reasons.”

These include high rent, insurance costs, and bad management — because your profit margins are intrinsically tied to the ability of your staff to make your business a profitable one, and many spa managers don’t have that ability.

Spas need to change the way they do a few things in order to increase profits. One of these things is training staff.

Spa staff don’t get the training they need to do their jobs

Training is a huge issue in spa. People are always telling us that managers are either trained in treatment and service providing, or in business management, but almost never both. And this is not going to work.

“Spa managers are either very good at business administration, but have no experience on the treatment side,” says Carlos Calvo Rodriguez, Corporate Director of Spa Training at Shangri-La Hotels and Resorts. “Or they’re very good with treatments but have no idea how to run a business. To have a profitable spa, the manager or director has to be good at both.”

Rodriguez says, “Unfortunately, the industry has been putting all its focus on training therapists or spa attendants. We don’t focus the training on the spa managers.”

Kathryn Moore concurs. “In some cases they’re running these huge assets, multi million dollar spas, and they’re not making any money,” she says. “It’s dead, because they don’t know how to do the sales and marketing; they don’t know how to manage the team; to performance manage, to run a training schedule; they don’t know how to make sure the inventory is looked after. So, there’s stock on the shelves that’s been there forever, or is expired, or stolen.

“We’re expecting these kids to run businesses without teaching them how.” And until you do, spas will continue to struggle with staffing and cash flow issues. Because you can’t make money without good staff, and you can’t have good staff if you don’t pay them.

Moore’s Spa Connectors offers the required programs, while at Shangri-La, Calvo-Rodriguez has recently implemented a program to focus training specifically on managers.

If you want to make your spa profitable, you will have to start properly training your management. But even then, staff can be hard to attract.

Attracting new talent requires keeping existing talent happy

Your employees can be your greatest evangelists or your biggest detractors. It’s up to you to make them one or the other. You won’t attract new talent if your existing talent hates their jobs.

Fortunately, Kim Matheson-Shedrick of spa consulting firm WTS International says it’s not all about compensation. And there are steps you can take to improve employee morale and commitment that don’t involve big raises (while you’re ramping up your training).

These include recognizing top performance and loyalty. “Ensure your staff know they are valued and a key part of the experience provided to customers,” says Matheson-Shedrick. “Reward and promote stand out employees and get creative with rewards.”

Surveys, she says, are a good way to determine what makes your top employees happy. “Ask them what makes them stay — and do more of that. The answers may surprise you.”

Other tips from Matheson-Shedrick and WTS include allowing employees the flexibility to work at multiple locations, sign-on bonuses for new hires, employee referral bonuses, higher commissions based on longevity, and opportunities for career advancement.

That last is a vital part of the puzzle.

According to research I and a colleague once conducted for a career site, all things being equal with compensation, benefits, and location, the most important factor for job seekers when evaluating a potential employment opportunity was “opportunities for advancement.”

However, we also found that managers usually look outside to hire for senior roles and 88% of employees have to change jobs to move up. And since the cost of losing an employee can be anywhere from 16% – 213% of that employee’s salary, you’re basically bleeding money at that point.

You have to create pathways to advancement. This should be much easier once you implement proper training for your managers. It will be more work in the beginning, but will cost you less than steady attrition in the long run.

Conclusion

Current methods of training and career pathing aren’t creating spa managers who are equipped to run profitable businesses. This creates a self perpetuating problem. Spas need to change the way they approach these things or they will continue to lose profit, and staff.

Actions spas should take

Improve training of management to increase profits

Ensure current staff is happy and motivated through reward programs and open communication

Create lines of career pathing to prevent high turnover

Once these things are in line, it will be even easier to extoll the virtues of the industry to top talent. The spa industry will have had it’s makeover.

The success of any business depends on the location and the attitude of practitioners.

I had received many treatments during my travels to educate myself and make comparisons for my own knowledge and if I find something more interesting worth sharing, I often encourage my past students and staff to new ideas.

However I found that many people who are practitioners have not had treatments done outside of their classrooms AND are not willing to learn anything new because they now have a certificate and considered themselves professionals.

This makes it hard for any business to be upgraded with an unwilling staff to be progressive especially in a small remote resort.

Small minded people don’t or refuse to realize that clients do compare techniques.

The other problem with staffing is bringing new practitioners in without having any available living quarters in a small remote town.

The most successful establishment has to upgrade as a whole and if the staff is unwilling or afraid of change then you have to change the staff… Unless everyone is on the same page in progress.

It is not about that piece of paper. It is about willingness to be progressive to retain and gain new clients.

A spa management degree covers treatments and the business side as well as students having commercial or work placement experience however it seems that the spa industry does not seem to value academia. Other courses such as diplomas or colleges offering Level 4 programmes or individual courses for example for spa managers to gain finance, marketing etc to get those gaps in skills seem to be the focus. Are these shorter courses becoming more popular because of time and cost to you think? Do you think Degrees in Spa Management are considered important within the spa industry?

I truly needed this information for my staff and management! I’ve tried to explain the difficulties but this article is on point! I emailed them with the link in hope of positive transitions!
Thank you! Thank you! Thank you!!

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